In a new bid to pressure Iran into negotiations over its nuclear program, a bipartisan group of senators introduced legislation on Wednesday that would deny the Iranian government access to as much as $100 billion in foreign exchange reserves held in banks around the world.
The legislation would be the first new sanction aimed at Iran since negotiations last month when the U.S. and European Union enacted a broad range of economic sanctions against the country believed to be continuing its enrichment of uranium,
The New York Times reported.
Supporters of the bill argue that Iran, which continues to deny developing nuclear weapons capabilities, has been able to circumvent some of the worst effects of the sanctions by tapping into its overseas foreign reserves.
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They also believe the measure would increase pressure on Tehran at a time when the country is already suffering significant economic troubles, while sending another strong signal about the West's resolve to stop the country's nuclear development activities.
"Closing the foreign currency loophole in our sanctions policy is critical in our efforts to prevent Iran from acquiring a nuclear weapons capability," said the bill's sponsors, Republican Mark Kirk of Illinois and Democrat Joe Manchin of West Virginia in a statement.
The legislation would impose severe penalties on any foreign financial institution that carries out foreign exchange transactions on behalf of Iran's central bank or any Iranian entity already included in other sanctions, the Times reported.
But critics of the legislation are worried it could further alienate Iran which believes the sanctions could be designed to push the country into economic collapse thereby triggering a regime change. Others are concerned it will increase the possibility of a full-blown military confrontation.
"When we've cemented a sanctions escalation path, we're creating a trajectory toward actual confrontation," said Trita Parsi, founder of the National Iranian American council, a group that opposes sanctions.
He added that some Iranian leaders see the sanctions "as a train that can only go in one direction and has no brakes," the Times reported.
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